SouthWest Water, Utility Authority Settle Disputes
SouthWest Water Company, a provider of water, wastewater and public works services, on Jan. 29 announced that it has reached a settlement in the legal proceedings between the company's subsidiary, New Mexico Utilities Inc., and the Albuquerque Bernalillo County Water Utility Authority.
The agreement calls for authority to acquire the assets of the utilities company in settlement of condemnation for $60 million. The funds will be paid to SouthWest Water at closing, which is expected within 120 days. The authority also agreed to offer employment to utility employees.
In addition, the settlement resolves all other legal issues between the parties, including the dispute over the sewer fee the authority charged the utility for the treatment of wastewater and the ownership of the return flow credits from that treated wastewater. As part of the settlement, New Mexico Utilities will pay $7 million to Albuquerque Bernalillo County Water Utility Authority at the time of closing to resolve the sewer fee issue.
"We are pleased to receive fair value for our New Mexico assets and bring to resolution three long-running and costly legal battles," said Mark Swatek, chief executive officer and chair of SouthWest Water. "While we regret that we will no longer be serving the residents of Albuquerque, management can now refocus its energies and resources on operating and growing our business."
The company will use the proceeds to retire utility debt of approximately $12 million as of the anticipated closing date and use the remaining cash proceeds to pay down its $150 million credit facility. On Dec. 31, 2008, the outstanding balance on the credit facility was $98 million.
SouthWest Water Company provides a broad range of operations, maintenance, and management services, including water production, treatment and distribution; wastewater collection and treatment and customer service. The company owns regulated public utilities and also serves cities, utility districts, and private companies under contract.